Ryman wins go-ahead for leak claim

One of the NZX's most popular companies, Ryman Healthcare, has won the right to take a weathertightness claim through the state system over its big St Heliers retirement village.

The Weathertight Homes Tribunal ruled the properties involved at the Grace Joel Retirement Village are not a rest home but dwelling houses so they are covered by the law which allows people or entities to use the state system to take a claim.

Ryman took the challenge via the body corporate of the Auckland village at 184 St Heliers Bay Rd, and Ryman chief executive Simon Challies said most of the repair work had already been completed.

"It's pretty much all fixed. It's about 80 per cent done. We made a call that it was up for fixing in regular maintenance with plastering and paint and made the call to upgrade the cladding at the same time," he said, refusing to specify how much it cost.

"It's in the millions. We've changed it to a cavity system," he said of exterior walls which now have the now-regulatory double-wall system to stop moisture from entering.

"We put in a claim some time ago," he said.

The tribunal ruled the Grace Joel places were apartments, flats or units occupied as private residences so dwelling houses under the definition of the Weathertight Homes Resolution Service Act 2006.

That overturned a decision by the chief executive of the Building and Housing Group of the Ministry of Business, Innovation and Employment who the tribunal said had concluded the claim was ineligible because it was a rest home, and so excluded from the act.

An assessor's report stated the places leaked and had been built less than 10 years ago, which is the eligibility timeframe.

"The occupants of each unit are generally either a single elderly person or a couple," the tribunal said. "The units are occupied as private residences by those with a licence to occupy them."

Challies said Ryman had developed the village but employed subcontractors on the job. It was the only Ryman village which had weathertightness issues.

Ryman's next step remains undecided.

"We took the decision to fix any potential weathertightness issues we needed to some time ago, using our own resources. We're still reviewing our eligibility for any financial assistance from the Weathertight Services Group," Challies said.

In 2009, Ryman was reported in the media as spending $2 million fixing 15 to 20 out of 69 units at Grace Joel because of the leaky building issue.

Last month, Ryman announced an underlying profit of $58.5 million for the first half year to September 30 which set a new record for the company, up 22 per cent on last year. Unrealised valuation gains lifted the reported profit after tax to $78.4 million.

Ryman shareholders are getting a 22 per cent lift in their interim dividend of 5.6c per share to be paid on Friday.

Ryman shares closed down 9c yesterday at $7.51.

Ryman Healthcare
*NZ's biggest listed retirement specialist.
*First Melbourne village under construction.
*Auckland leaky buildings have been fixed.
*Ryman can now proceed with a claim.
*No decision has been taken about next step.